Barrick seeks $3.5B financing for Pakistan copper mine

Barrick Mining (NYSE: B; TSX: ABX) aims to secure up to $3.5 billion in financing from the United States and other international lenders to build its massive Reko Diq copper-gold mine in Pakistan, after long-promised Saudi funding failed to materialize.

The company is working on a G7-country financial package for the Reko Diq project, in Balochistan province, CEO Mark Bristow told the Financial Times on Monday. Talks involve the World Bank’s International Finance Corporation (IFC), the US Export-Import Bank and Development Finance Corporation, the Asian Development Bank, and lenders in Germany, Canada and Japan.

There is much interest to support Pakistan, Bristow said, adding that the $9-billion project had put a spotlight on the region. 

Copper concentrate access

Any US government backing would give the country access to copper concentrate from the mine, though the material would still need to be processed into metal, Bristow said, though the country would need more domestic smelters to reduce its reliance on Chinese metal imports.

Barrick shares fell 2.3% to $31.46 apiece at mid-afternoon on Monday in Toronto, for a market capitalization of $53.67 billion. The stock has traded in a 12-month range of $21.73 to $32.37.

Reko Diq is considered one of the largest undeveloped copper-gold deposits in the world, projected to generate more than $70 billion in free cash flow over the next 37 years and $90 billion in operating cash flow over its lifetime. The project is jointly owned by Barrick and the governments of Pakistan and Balochistan.

The mine’s first stage, targeted to begin production in 2028, is under active financing negotiations.

The mine is seeking $650 million from the IFC and International Development Association; $500 million to $1 billion from the US Export-Import Bank; and $500 million from other development finance institutions, including the Asian Development Bank, Export Development Canada and the Japan Bank for International Cooperation, project director Tim Cribb said earlier this year.